SUPERIOR COURT OF JUSTICE - ONTARIO
Editor’s note: Addendum released on August 29, 2014. Original judgment has been corrected with text of addendum appended.
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Diana Lynn Monk, Plaintiff (Responding party)
AND:
Farmers’ Mutual Insurance Company (Lindsay), Defendant (Moving party)
AND:
Muskoka Insurance Brokers Ltd., Defendant (Moving party)
BEFORE: E.J. Koke
COUNSEL:
David A. Morin, Counsel for the Plaintiff (Responding Party)
Martin P. Forget, Counsel, for the Defendant, Farmers Mutual Insurance Company (Lindsay) (Moving party)
Demetrios Yiokaris, Counsel for the Defendant, Muskoka Insurance Brokers Ltd. (Moving party)
ENDORSEMENT on costs - Summary judgment Motions
INTRODUCTION AND OVERVIEW
1The defendants, Farmers’ Mutual Insurance Company (Lindsay) (“Farmers’ ”) and Muskoka Insurance Brokers Ltd. (“Muskoka”) brought summary judgment motions against the plaintiff and were successful. The parties have now filed written Costs Submissions which are before me for consideration.
2I have reviewed and considered the submissions filed by counsel, and their respective replies thereto. I have taken into account the factors enumerated under Rule 57, including the time spent, the result achieved, and the complexity of the matters, as well as the application of the principle of proportionality: Rule 10.4(1).
3In addition, I have considered the principles set forth by the Court of Appeal in Boucher v. Public Accountants Council for the Province of Ontario (2004), 2004 14579 (ON CA), 71 O.R. (3d) 291 (C.A.) and Davies v. Clarington (Municipality) (2009), 2009 ONCA 722, 100 O.R. (3d) 66 (C.A.), specifically that the overall objective of fixing costs is to fix an amount that is fair and reasonable for an unsuccessful party to pay in the particular circumstances, rather than an amount fixed by actual costs incurred by the successful litigant.
4Muskoka seeks $60,000 all-inclusive for costs; Farmers seeks $81,639.03. These costs are broken down between costs incurred in relation to the main action and costs of the motion.
5I do not take issue with the hourly rates which are requested by counsel, nor do I take issue with the amount of time they devoted to the action and the motion.
6The plaintiff submits that :
a) This is a case for a finding that costs should not follow the event;
b) Costs should be denied or reduced to reflect the balancing of the indemnity principle with the fundamental objective of access to justice;
c) In the alternative, costs should be payable on a reduced partial indemnity basis;
d) Costs should be reduced as a result of the failure to bring the motion with dispatch.
7The plaintiff requests that in the event this court finds that costs should be payable, an appropriate and proportionate measure of partial indemnity costs payable for both the motion and the action, would be in the range of $15,000 plus disbursements for Farmers, and $10,000 plus disbursements for Muskoka.
8I am ordering that the plaintiff pay costs of $30,000 to Farmers’ and $20,000 to Muskoka, both inclusive of disbursements and HST. In making this decision I am influenced by the following considerations:
9Firstly, the primary issue before the court on the summary judgment motion involved a matter of interpretation of a homeowners’ insurance policy. The parties knew that this was an issue at the outset. In my view, in the context of this lawsuit it was unnecessary to embark on the lengthy and costly discovery and cross-examination process which preceded the summary judgment motions. The defendants have to assume some responsibility for their failure to bring their motion with dispatch.
10Secondly, the plaintiff’s claim was not frivolous and without merit. Her own insurance broker encouraged her to file a claim with her insurer. The adjuster assigned to review the claim was of the view (at least initially) that her claim was meritorious. In my view, she acted in good faith in bringing her claim.
11Thirdly, the point of law was novel, being the interpretation of the “faulty workmanship” exclusion in the Farmers’ policy, an exclusion which omits the usual phrase in homeowner’s policies about resulting damage being excepted. Counsel were unable to direct me to one Canadian case which dealt with the point; all cases dealing with the exclusion referred to by counsel made an exception for resulting damage. This entire law suit could have been avoided if Farmers’ would have simply added a phrase to the “faulty workmanship” exclusion which made it clear that resulting damage was “included” as part of the exclusion. Farmers’ was responsible for drafting the policy and in my view it must take some responsibility for its failure to do so.
12Fourthly, with respect to my decision to order more costs to be paid to Farmers’ than to Muskoka I am taking into consideration the fact that in its submissions Farmers’ relied only on the “faulty workmanship” exclusion. Farmers did not take the view that there were other exclusions which would preclude coverage. Muskoka sought additional findings that three other exclusion clauses also operated to exclude the loss. It was not successful on these three arguments, which consumed considerable time.
13Fifthly, with respect to the offers to settle which were served on plaintiff’s counsel, in my view there was insufficient compromise contained in these offers to justify treating them as Rule 49 offers.
14Finally, there is a real access to justice issue at play here. The plaintiff had what she believed was a meritorious claim. It was a claim which could only realistically be assessed at about $100,000.00. In seeking legal redress for her claim, she chose to avail herself of the judicial system. I have found that Ms. Monk did so in good faith. It was resolved within the context of this system, without the parties having to incur the expense of proceeding to trial. In my view, if I was to assess the defendants’ costs in the amount which they request, I would be sending a message to individual members of the public such as Ms. Monk that the judicial system is no longer available to be used by them; it has simply become too costly to be accessed by the public. I am unwilling to send out such a message.
E.J. Koke (SCJ)
Date: August 26, 2014
COURT FILE NO.: CV-11-093
DATE: August 29, 2014
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Diana Lynn Monk, Plaintiff (Responding party)
AND:
Farmers’ Mutual Insurance Company (Lindsay), Defendant (Moving party)
AND:
Muskoka Insurance Brokers Ltd., Defendant (Moving party)
BEFORE: E.J. Koke
COUNSEL:
David A. Morin, Counsel for the Plaintiff (Responding Party)
Martin P. Forget, Counsel, for the Defendant, Farmers Mutual Insurance Company (Lindsay) (Moving party)
Demetrios Yiokaris, Counsel for the Defendant, Muskoka Insurance Brokers Ltd. (Moving party)
Addendum to ENDORSEMENT on costs - Summary judgment Motions
15This is an addendum to my endorsement on costs which I released on August 26, 2014, following receipt of Mr. Forget’s correspondence and reply submissions.
16I have considered Mr. Forget’s most recent submissions carefully. I can assure counsel that all issues addressed in his reply which were not addressed in previous submissions were anticipated and considered by me in preparing my endorsement. In other words, if I would have received Mr. Forget’s reply prior to releasing my decision the result would have been the same.
17I can advise counsel that in arriving at my decision the consideration to which I attached the most weight was the access to justice issue. This was not a complex case. The potential damage assessment was modest. It did not proceed to trial. However, in excess of $300,000 in actual costs were incurred by the three parties. I am holding all parties responsible for the fact that costs were allowed to exceed what was reasonable in the circumstances of this case.
E.J. Koke (SCJ)
Date: August 29, 2014